Petron agrees to hike lease payments on PNOC properties

Leading oil firm Petron
Corporation has agreed in principle to renegotiate and increase the lease fees
it has been paying for its use of the properties of state-run Philippine
National Oil Company (PNOC).

According to Petron
President and Chief Executive Officer Ramon S. Ang, he was already filled in
with the inclination of PNOC President Reuben S. Lista to hike the oil firm’s
lease payments and he is agreeable to it – but on condition that they seek
third party “fairness valuation” of the subject real estate assets.

“His people have been
suggesting increase in lease payments and to renegotiate (the terms) and that
is okay with us,” he noted.

Ang further indicated
that he is already scheduled to meet with the PNOC chief executive, “I am just
waiting for him to return from overseas travels.”

Tentatively, he
disclosed to media that they are arranging for a meeting next week and discuss
concerns on the continued tenancy of Petron at the state-run firm’s properties.

Ang emphasized that the
only major question now is “how do we determine the price? So we need to have
the properties appraised, to have ‘fairness valuation’. So we need to tap a
third party… Petron can get its own third party to do the valuation; and PNOC
can also tap its own.”

And from there, the
Petron chief executive proposed that they will have to negotiate on a
“compromise price” that Petron will be paying to its former parent firm.

Lista previously noted
that the P475,000 annual rent being paid by Petron at their 4.3-hectare Mabini
property in Batangas is “way below market”; and has been causing too much
foregone revenues for the state-owned company.

The same goes for the
other PNOC properties that have been serving as project sites for heaps of
Petron assets – including its depots in various parts of the country.

This has been prompting
PNOC then to advance negotiations with the oil firm – way ahead of the lapse of
their lease contract by next year.

On a deeper legal
sphere, it was noted that negotiations may also delve with the arrangements
that Petron had sealed with PNOC when some properties were placed under
latter’s charge as its partner-firm then Saudi Aramco, a foreign entity, cannot
own real estate properties in the country.